You can be a millionaire in 25 years if you start getting ready today. Having a cool million in the bank may seem unimaginable right now. Perhaps you have little or no savings to speak of, and your current salary doesn’t do much more than cover your monthly expenses. Maybe you haven’t even thought about retirement planning just yet. You may be in a position familiar to millions of Americans, saddled with high levels of credit card and student loan debt that make saving any money at all challenging.
Perhaps you’re facing one or more of these situations, and just thinking about how to stop spending and start saving may seem like a bridge too far. However, regardless of your current financial situation, you can amass $1 million in 25 years if you’re willing to work at it.
If you haven’t given the idea of building wealth over time much thought, you definitely should start. A million dollars doesn’t go as far as it used to. In fact, depending on where and when you retire, you may need at least a million dollars to live comfortably when you’re done with work, if not more. How do you do it? Here are nine things you should consider if you want to go from zero savings to a millionaire in the next 25 years.
1. Make a Plan
One of the primary reasons so many Americans fail to amass significant wealth for retirement is that they fail to plan for it. According to recent research compiled by Charles Schwab, only one in four Americans have a deliberate financial plan to guide savings and investment decisions. Most Americans simply live paycheck to paycheck. If you don’t plan to be a millionaire in 25 years, then it’s almost certainly not going to happen.
Find a trusted financial advisor as soon as you can and have him or her help you make a financial plan. Your plan should include long-term objectives and short-term savings and investment goals that help guide you towards those objectives. A written plan will also help you “keep score.” It’ll serve as a guide for financial decision-making from month to month, and allow you to measure your progress over time.
2. Prepare to Save
One of the most important components of any plan to amass $1 million in 25 years is savings. You’ll have to save money consistently month after month if you ever expect to reach your long-term goals. Having the patience and discipline to save money over a long period can be extremely challenging. However, if you’ve made a financial plan and you’re committed to it, you can build up your savings effectively over time.
Exactly how much money will you have to save each month to retire as a millionaire? Well, that depends. If you simply channel your money into a standard savings account that earns very little interest, you’ll likely have to save a great deal each month. Conversely, if you choose to invest your savings in other financial instruments, such as stocks or mutual funds, you can potentially earn a greater return on your investment.
However, stocks and mutual funds carry greater risks as well; you could lose money, depending on your investments and the market conditions. As you attempt to determine how much to save and the best way to do it, make sure you talk to a trusted financial advisor. A good advisor can help you make informed decisions about how to invest your hard-earned money at a level of risk that makes sense.
3. Get Out of Debt, and Stay That Way
Debt can be a major obstacle to accumulating wealth, and many Americans are struggling with it right now. U.S. households currently carry an average of $16,000 in credit card debt from month to month. Debt, and the interest expenses associated with it, makes it difficult for people to save and invest money effectively, as it’s hard to save any money for the future if your paychecks are eaten up by ever-increasing credit card payments each month. If you want to become a millionaire in 25 years, you’ll have to make dealing with any debt you’re carrying a top priority.
There are many ways to get out of debt. In some cases, it may simply require a little bit more restraint and discipline when it comes to using your credit cards and paying down your balances each month. However, people who are carrying serious debt loads may have to use other strategies, such as obtaining a debt consolidation loan or using debt settlement services such as those offered by National Debt Relief. Once you make a plan to get out of debt, follow it. If you’re debt free, you’ll have more leeway to save and invest money, which will give you a greater chance of achieving your long-term financial goals.
4. All About Earning
If you want to amass $1 million in 25 years or less, you should consider how much you’re earning today and how much you could potentially earn tomorrow. If you’re working in a job or career field that limits your ability to save and invest sufficiently, it may be difficult to achieve your long-term financial goals. In some cases, it may be worth considering a different job, or an entirely different line of work altogether, especially if you expect the change will enhance your long-term earnings potential. Even if changing careers results in a temporary downturn in cash flow, it’ll be worth it if future paychecks are larger and get you closer to your long-term financial objectives.
If pursuing a new job or career field isn’t feasible right now, there are still other options that can help you earn more to save and invest. You may be able to work more hours in your current job and commit the additional earnings to your savings plan. Alternatively, you could get a side hustle and use the money earned to get you on the path to being a millionaire. Driving for Uber or Lyft a few hours a week, for example, can help you save and invest several hundred more dollars each month. However you do it, strive to optimize your earnings so you can maximize the money you have available to save and invest.
5. Invest in Your Most Valuable Asset: You!
The average person undergoes 12 job changes throughout his or her career. If you want to become a millionaire in 25 years, you have to make every one of those job changes count. Take advantage of training and education opportunities as you advance in your current career or select a new one. Your objective should be to increase the value of the work you do – and the compensation attached to it – with each job change.
As you consider all the savings and investment components of your long-term financial plan, make sure you don’t sell yourself short in the process. You should be willing to pursue, and even pay for, training and education opportunities that increase your earnings potential. Even if additional training or education cuts into your savings plan a bit, it’ll likely be worth in the long run. Investing in yourself and your potential is one of the best ways to reach your financial objectives.
6. Live Below Your Means
If you make a comfortable living, one of the best ways to optimize your savings and investment potential is to live as if you have less money available than you actually do. Just because you can afford a larger home and a better car right now doesn’t mean you should go out purchase them today. Instead, if you live below your means, you’ll be able to commit more money toward your long-term financial objectives. You may even be able to become a millionaire in less than 25 years, depending on how much you’re willing to forego.
It can be challenging to live below your means. People often face pressure to commit financial resources to large purchases that improve quality of life, or that conform to social norms. However, if you can maintain a comfortable standard of living by foregoing large purchases when you’re promoted, or resisting the call to upgrade big-ticket consumer items when the current ones suffice, then you’ll be in a better position to achieve your long-term financial goals. Living below your means can also help relieve some of the stress people feel in their lives due to the pressures of managing their day-to-day finances.
7. Get Thrifty
Thanks to the internet, money-saving apps, and the thousands of penny-pinching self-help books that are available these days, it’s easier than ever to make the most of the money you have on hand. If you commit a little extra time to researching and preparing for basic expenditures on everyday items, you can end up saving serious money each month. The savings you realize from a bit of thriftiness can be diverted into your long-term investment plan, helping you to reach your goal of saving $1 million in 25 years.
There are dozens of smartphone apps out there that can help you save money on everyday activities. Great coupon and shopping apps such as Ibotta permit you to earn instant rebates every time you buy groceries. Groupon can help you realize substantial savings on entertainment expenses, dining out, and other activities. If you don’t have a smartphone, old-school thriftiness still works just fine, too. Packing a lunch each day instead of eating out, for example, can save you $200 or more every month. However you do it, every penny saved through a little thrift is another penny that can be invested toward your long-term financial objectives.
8. Become More Financially Literate
If you want to become a millionaire, you should learn as much about money and finances as you can. If you aren’t financially literate, you should start becoming so now. Even if you consider yourself knowledgeable when it comes to all things financial, you can never really know enough. Work hard to learn everything you can when it comes to money. The more you know about personal finance, the better chance you’ll have to avoid common pitfalls and take advantage of fleeting opportunities.
Read as much as you can on personal finance. Numerous reputable websites exist that you can peruse each day, along with newspapers such as The Wall Street Journal and Investor’s Business Daily. Take the time to read them and focus on articles and columns related to personal finance and investing. If you have an opportunity, either through work or in your spare time, try to take classes or attend finance-related seminars as well. The more you understand about money and finances, the better chance you have of achieving your long-term financial goals.
9. Get Help
If you haven’t managed to pick up on this theme yet, you should never go it alone when it comes to your personal finances. After all, you rely upon expert advice in all other aspects of your life, from your health care to automobile maintenance, so there’s no reason to leave your financial planning to chance. Instead, you should try to find trusted financial advisors to guide and inform your long-term financial planning and decision-making.
Certified financial planners can help you build a long-term financial blueprint for success, provide sound investment advice, and help you gauge progress as you attempt to achieve your various financial goals. Additionally, certified public accountants can help you budget your money more effectively, and assist you with tax decisions and preparation. Finally, if you’re having trouble with debt, credit counselors can help you deal with lenders and make a plan to become debt-free. Regardless of your current situation, trusted financial advisors are a tremendous resource that can keep you on track to go from zero to millionaire in 25 years.
Are you ready to get on the path to earning $1 million over the next quarter century? You should be! Having money isn’t about vanity or keeping score; it’s the key to building the kind of future you want to be a part of. If you take the advice here, you’ll be in a good position to go from zero to millionaire in 25 years. So, commit to making a plan and take the first step on a long-term journey to financial security today.